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Pyramid schemes typically work as a club, where individuals pay their “joining fee” or “gift” or “donation” to people further “up” the pyramid, in the expectation that they themselves will get paid by new recruits who join further “down” the pyramid.
Be wary: they’re frauds, scams, confidence tricks, and illegal in most countries for the simple reason that people are given the fraudulent impression they will definitely make money when in fact they are extremely likely to lose money – unless they happen to be in the top few levels of the pyramid.
It sounds like an easy way to get rich, until you realise that the only way that anybody makes money in a pyramid scheme is by taking it directly from other participants – chiefly friends, relatives and co-workers. Also, it takes a very short time for a geographical or social community to be swamped with scheme members, the vast majority of whom will never make any money from the scheme – as you can see if you run the numbers in our calculator.
Tool by HomePage Media.